There are at least 109 different All Cap Blend ETFs and at least 447 ETFs across twelve styles. Do investors need 37+ choices on average per style? How different can the ETFs be?

Those 109 All Cap Blend ETFs are very
different. With anywhere from 19 to 7672 holdings, many of these All
Cap Blend ETFs
have drastically different portfolios, creating drastically different
investment implications.

The same is true for the ETFs in any other style, as each offers a very different mix of good and bad stocks. Large Cap Blend ranks first for stock selection. Small Cap Growth ranks last. Details on the Best & Worst ETFs in each style are here.

How to Avoid Paralysis by Analysis

We think the large number of All
Cap Blend (or
any other) style ETFs hurts investors more than it helps because too many
options can be paralyzing. It is simply not possible for the majority of
investors to properly assess the quality of so many ETFs. Analyzing ETFs, done
with the proper diligence[1],
is far more difficult than analyzing stocks because it means analyzing all the
stocks within each ETF. As stated above, that can be as many as 7672 stocks, and sometimes
even more, for one ETF.

You need to be sure you do not buy an ETF that might blow up. Buying an ETF without analyzing its holdings is like buying a stock without analyzing its business and finances. No matter how cheap, if it holds bad stocks, the ETF’s performance will be bad. Don’t just take my word for it, see what Barron’s says on this matter.

PERFORMANCE OF
FUND’S HOLDINGS = PERFORMANCE OF FUND

Analyzing each holding within funds is no small task. Our Robo-Analyst technology enables us to perform this diligence with scale and provide the research needed to fulfill the fiduciary duty of care. More of the biggest names in the financial industry (see At BlackRock, Machines Are Rising Over Managers to Pick Stocks) are now embracing technology to leverage machines in the investment research process. Technology may be the only solution to the dual mandate for research: cut costs and fulfill the fiduciary duty of care. Investors, clients, advisors and analysts deserve the latest in technology to get the diligence required to make prudent investment decisions.